7/31/2011

Accounts Receivable and Bad Debts Exp

www.credila.com

Ads by Google

Search our website for more than 1,000 accounting topics:

Search our Site

Home About 1,380 Testimonials

Accounting Topics

Test Yourself

Bookkeeping

Download Materials

Q&A

Careers

Dictionary

Quiz for the Topic...

New to our website?

View our most popular accounting topics Read our credentials
Bookmark |

Accounts Receivable and Bad Debts Expense

Print

NOTE: For multiple-choice and true/false questions, simply place your cursor over what you think is the correct answer. (There is no need to click the answer.) For fill-in-the-blank questions place your cursor over the _________. If you have difficulty answering the following questions, learn more about this topic by reading our Explanation of Accounts Receivable. We also have Crosswords and Q&A for this topic.

Bookkeeping Exam
Gain knowledge and confidence with accounts, debits & credits, accounting basics, and more. Download now

Financial Exams
1. When a sale is made with the credit terms of 2/10, net 30, the "10" refers to the _______________ period.

Covers 16 financial accounting topics (640 questions). Download now

2.

On June 1, $800 of goods are sold w ith credit terms of 1/10, n/30. How much should the seller expect to receive if the buyer pays on June 8? $720 $784 $792 $800

Managerial Exams
Covers 19 managerial accounting topics (520 questions). Download now

3.

On June 1, $800 of goods are sold w ith credit terms of 1/10, n/30. On June 3 the customer returned $100 of the goods. How much should the seller expect to receive if the buyer pays on June 8? $692 $693 $700 $792

Receive our popular 19-page Cheat Sheet at no cost when you join our free newsletter:
4. With credit terms of 2/10, n/30, the annual interest rate for paying in 10 days instead of 30 days is closest to 2% 24% 30% 36%

First Name:

Email Address:

5.

When the terms of a sale are FOB ________________, ownership of goods will transfer to the customer at the customer's dock.

Join Our Newsletter

90,000+ have already joined

The seller is responsible for the costs of shipping its goods to the buyer when the terms of the sale are FOB Destination Shipping Point

6.

Business Forms
7. The buyer is responsible for the costs of shipping when goods are sold with the terms FOB

Browse our 87 business forms and templates. Download now

accountingcoach.com//24Dpg01.html

1/4

7/31/2011
Destination

Accounts Receivable and Bad Debts Exp

Shipping Point

8.

When the Allow ance for Doubtful Accounts appears on a company's financial statements, its balance will be a __________ balance. debit credit

Accounting Jobs
Accounting job listings for job-seekers and employers. Browse accounting jobs

9.

On which financial statement w ould you expect to find Allowance for Doubtful Accounts? balance sheet income statement

10.

W hich method of reporting losses on accounts receivable is required in the U.S. for income tax purposes? allowance direct write-off

11.

W hich method of reporting losses on accounts receivable is to be used for financial reporting? allowance direct write-off

12.

The seller of goods that is offering credit terms of net 30 days will likely be one of its customer's _____________ creditors until it receives payment. secured unsecured

13.

After several years of operations, a company's Bad Debts Expense for a given year is likely to be the same as its balance in Allow ance for Doubtful Accounts. True False

14.

A company estimates that $20,000 of its $500,000 of accounts receivable will be uncollectible. Its Allowance for Doubtful Accounts presently has a credit balance of $8,000. The adjusting entry will include a ___________________ to the Allowance for Doubtful Accounts. debit of $12,000 credit of $12,000 debit of $28,000 credit of $28,000

15.

A company estimates that $20,000 of its $500,000 of accounts receivable will be uncollectible. Its Allowance for Doubtful Accounts presently has a credit balance of $18,000. The adjusting entry will include a ____________________ to Bad Debts Expense. debit of $2,000 credit of $2,000 debit of $38,000 credit of $38,000

16.

A company estimates that $20,000 of its $500,000 of accounts receivable will be uncollectible. Its Allowance for Doubtful Accounts presently has a debit balance of $3,000. The adjusting entry will include a _____________________ to Allow ance for Doubtful Accounts. debit of $3,000 credit of $3,000 debit of $17,000 credit of $17,000 debit of $23,000 credit of $23,000

accountingcoach.com//24Dpg01.html

2/4

7/31/2011
TATA Hiring for July 2011

Accounts Receivable and Bad Debts Exp

10,000+ Job Openings across India Upload Resume.Apply to TATA Now!

TimesJobs.com/TATA-Hiring

Use the following information for questions 17-21: A company is expecting thousands of credit sales transactions each week with terms of net 30 days. The company uses the allowance method and it prepares weekly financial statements. It believes that 0.001 of its credit sales will be uncollectible. The company's credit sales for its first week of operations are $500,000. The credit sales for its second week are $600,000.
The company's bad debts expense for its first week of operations will be $__________.

17.

18.

The balance in Allowance for Doubtful Accounts at the end of the first w eek w ill likely be $____________.

19.

The company's bad debts expense for its second w eek of operations will be $___________.

20.

The amount of accounts receivable that you expect will be w ritten off by the end of the company's second week of operations is $___________.

21.

The balance in Allowance for Doubtful Accounts at the end of the second week of operations will likely be $_____________.

Use the following information for questions 22-25: A company's Allowance for Doubtful Accounts has a credit balance of $25,000. It learns that one of its accounts receivable amounting to $1,800 is worthless and needs to be written off.
22. W hich account should be debited for $1,800 when w riting off the account? Allowance for Doubtful Accounts Accounts Receivable Bad Debts Expense

23.

W hich account should be credited for $1,800 when w riting off the account? Allowance for Doubtful Accounts Accounts Receivable Bad Debts Expense

24.

Assuming that after the account is w ritten off, the supplier receives full payment from the customer. Which account will not be involved in the accounting entries made at the time when the payment is received? Allowance for Doubtful Accounts Accounts Receivable Bad Debts Expense

25.

Under the direct write off method, which account is debited when a company writes off one of its accounts receivable? Allowance for Doubtful Accounts Accounts Receivable Bad Debts Expense

26.

Sorting a company's accounts receivable into classifications such as current, 1-30 days past due, and 31-60 days past due is known as the ___________ of accounts receivables.

accountingcoach.com//24Dpg01.html

3/4

7/31/2011

Accounts Receivable and Bad Debts Exp

27.

The receivable turnover ratio is computed by dividing the net credit __________ for the year by the average amount of accounts receivable during the year.

28.

The days' sales in accounts receivable is calculated by dividing ________ days by the receivables turnover ratio during the year.

29.

A company's accounts receivable minus its allow ance for doubtful accounts equals the net ________________ value of the accounts receivable.

30.

In some industries, companies often sell their accounts receivable to a firm known as a ______________.

About the Author: Harold Averkamp (CPA) has worked as an accountant, consultant, and university accounting instructor for more than 25 years. He is the author of the 2011 Master Accounting Download Package which has been praised for its ability to simplify accounting in a way that anybody can understand.

Click here to get ALL of our materials in PDF format!

About | Advertise | Affiliates | Copyright | Contact | Disclaimer | Helpful Links | Privacy | Site Map | Teachers | Testimonials
Copyright 2004 - 2011 AccountingCoach, LLC. All rights reserved. AccountingCoach is a registered trademark.

accountingcoach.com//24Dpg01.html

4/4